Edwin Lyngar, a freelance writer, penned a “From the Left” piece this week in the Reno paper under the headline, “Trump’s tax policy is an attack on the community”. He hit the Tax Cuts and Jobs Act (TCJA), President Trump and all Republicans and limited government conservatives.

We say “hit” because it was the usual leftwing label-and-bash fest, long on nasty rhetoric and not only devoid of evidence, but in fact contrary to well known facts and data.

His opening sentence calls the TCJA, “terrible … and a massive redistribution of wealth to the already super-rich.”

The federal Internal Revenue Service, however, shows that the demonized top one percent of earners pay 38 percent of all personal income taxes, while receiving only half that portion – 19 percent – of total personal income. Further, the top five percent of earners garner 34 percent of income but pay 59 percent of income taxes.So what did Trump and the Republicans’ TCJA do from that starting point? It gave the bottom 80 percent of tax payers the net cuts and the top quintile (20 percent) the net increases, according to estimates by the Heritage Foundation. (No government agency has made estimates of these distributional effects.) The second and middle quintiles got most of the net cuts, but the lowest and fourth quintiles also got some.

Notably, the super-rich one percent got the biggest net increases. And the top quintile got the total net increase even though those folks already pay two-thirds of the total income tax bill.

In sum, from a personal income tax already radically skewed progressive, the TCJA extended the massive redistribution previously in place to further burden the top quintile and especially the one percent to provide more benefit to the lower- and middle-income 80 percent. The opposite of Lyngar’s claim and standard leftwing narratives.

Another fact leftwingers conveniently overlook is that in a primarily market economy, people get income and accumulate wealth mainly by delivering value to others (their customers, employees and stockholders). Hence, contra their view that the wealthy don’t deserve what they get and have, on average the wealthy actually benefit the public interest as providers and producers while the lower income groups are a net burden on it as consumers of subsidy.

Lyngar also complains that the corporate income tax has decreased over time as a fraction of federal revenues. He adds: “A small slice of corporate America is pocketing obscene wealth, while regular people are left with the bills.”

He fails to understand what nearly all economists know: Corporations don’t so much pay income taxes in the sense of their owners carrying the actual burden in reduced earnings as they pass them on to their customers via higher prices and to their employees via lower wages and reduced employment. Moreover, the TCJA cut America’s marginal corporate tax rate from by far the highest among developed countries to somewhat above the world average.

When he adds rhetoric like “obscene” to his complete ignorance of the facts and their clear contradiction of him, it’s no wonder he’s a freelance writer. Who would hire such a hyper-aggressive ignoramus? He doesn’t even attempt to define or justify the use of “obscene.”

He also hyperventilates that health care and his other sacred cows “are being driven to the brink of failure in a systematic, enthusiastic dismantling of our communities.” He says “every worthwhile program inevitably fails from starvation or neglect” and there’s a “certain evil genius to it.”

But the facts are that in the mid-1960s both federal spending and revenue were below 17 percent of our economy. Today spending has risen to nearly 21 percent while revenues are about 18 percent. And 70 percent of the federal budget goes to health care and social and income security.

The cheap accusations of “enthusiastic dismantling,” “starvation or neglect” and “evil genius” are just more lies using sophomoric rhetoric. To paraphrase James Carville, “It’s the spending, stupid!”​Following the false and completely unsupported labeling of President Trump as a “racist,” he claims “Trump’s GOP has declared war on all of us.” This illustrates the point that leftists often hate and lie. For many leftists, hating and lying are their stock in trade.

We need a break from politics. So, it’s our good fortune this month marks the 50th anniversary of perhaps the most remarkable film ever, producer/director Stanley Kubrick’s 2001: A Space Odyssey.

Even more than Gone with the Wind, itwas the most revolutionary film. It was radically different from everything before it, and it influenced all film after it more than any other work. Yet, nothing made since 1968 is really like it, either.

It was technologically the most revolutionary film, especially because it necessarily used analog technologies to simulate (or predict?) the digital future. But more than that, it was intellectually, spiritually, culturally and esthetically distinct from everything else. It’s also the most audacious, presenting in four movements a cosmic story that begins on earth with The Dawn of Man and reaches out millions of years to Jupiter and Beyond the Infinite.

The first movement shows a group of hominids living on the African plains inspired by the sudden appearance in their den of a featureless large black monolith. It is ushered in to the stunning and portentous C-G-C opening chords of Richard Strauss’s Also Sprach Zarathustra. They discover tools, and then weapons. This allows them to prosper, but also to bring violence against their neighboring clan.

emorable scenes in all filmdom – is the transition from the first movement to the second, set in 2001. After routing their neighbors from their watering hole, with a growl the leader of the pack heaves his newly discovered tool/weapon – a large bone – into the air. As it tumbles, it becomes a future spaceship rotating through space to synchronize with the landing bay of an earth-orbital space wheel where it will dock.

The sheer visual beauty of this space waltz is matched by the elegant music of The Blue Danube, the masterpiece of Johann Strauss II. The first time one sees this scene, the most famous waltz becomes in fact The Space Waltz, transcending its Viennese roots.

By 2001, the monolith has become embedded in the moon, creating a scientific mystery for mankind by beaming a strong signal toward Jupiter. Pursuing this mystery, two astronauts and three others in hibernation embark 18 months later toward the Jovian planet, a voyage managed by the onboard HAL9000 computer, Hal.

Hal has been programmed to interact like a sixth human crew member, but as he proudly notes, the 9000 series has never distorted a single piece of data or otherwise faulted. Hal says that by any standard he (and the parallel 9000 unit back on earth) are foolproof and incapable of error.

Of course, this hubris sounds all too human, and Hal does make a key error, which is discovered by the two active crew. This causes Hal to go off the rails and kill all the crew, except Dave, who survives through human ingenuity and determination. The scene in which Dave penetrates Hal’s brain area and shuts it down is also one of the most memorable ever, as Hal says slowly: “I can feel it, Dave. My mind is going.”

Kubrick termed the film “experimental” and he rolled up huge cost overruns and production delays. It is also quiet, including no dialog in the first and last 20 minutes. Very enigmatic and non-verbal throughout much of its 142 minutes. The two main characters, Hal and the monolith, aren’t even human.

All this was too much for many in opening night audiences who walked out, and for most critics, who roundly panned it. But it got legs with young people, who saw it multiple times, and it became the box-office hit of the year.

Some people say the young folks were entranced by the psychedelic scene in which Dave begins the final descent to Jupiter. In any event, once there, he finds a remarkable world in which he repeatedly sees himself in the past and future, culminating in the lumpen old man peacefully in his death bed gazing at the monolith.​This is where the story pays off, not in a pat conclusion but in his metamorphosis into a human fetus gazing from space at the earth. The mystery, triumph and glory of rebirth.

This fourth column on the Controller’s Annual Report (CAR) analyzes state taxes. Nevada collected $5.523 billion in taxes in fiscal year 2017, which was 41 percent of total state revenues. As discussed in our previous column, program revenues made up 56 percent, with miscellaneous items at three percent.

The largest tax sources were sales and use taxes ($1.285 billion or 23 percent of general revenues of $5.895 billion), gaming taxes ($897 million or 16 percent) and unemployment assessments ($825 million, or ten percent). All other taxes totaled $2.516 billion, or 43 percent).

There is no definitive right level of taxes relative to incomes and the economy. However, as discussed in the CAR, the overall level of state and local spending in the U.S. has long been well above public-interest levels, yet still rising. In Nevada, local-government taxes are the really big problem (due to high spending and pay), and state taxes a somewhat lesser problem.

Regarding trends, the CAR shows the following.The burdens on consumption and on persons of state taxes declined in the last decade. Revenues from the following key taxes fell significantly relative to the growth in incomes: sales and use, gaming, property, motor and special fuels, and other minor items. The incidence of these declining tax revenues lies greatly with consumption, not with savings, investment and employment; and on persons, not businesses.

To compensate for this decline, the state added new levies and increased taxes mainly on savings, investment and employment and on business.It did so via the modified business tax (MBT, which mainly taxes employment) and unemployment assessments; also, partly via the commerce tax, levies on auto leasing, lodging and insurance premium taxes. The large hike for unemployment assessments, was driven mostly by federal mandate.

So, the growth of total tax burden is trending down, but that trend masks a shift of burden from consumption to savings, investment and employment; and from persons to business.

Claims have been made that repealing the commerce tax, as we and others have proposed, would cause significant harm to K-12 education. Also, that people seeking repeal should state what spending they will cut if the tax is repealed. These claims are wholly false and misleading.

There’s no direct connection between commerce tax revenues and state K-12 spending. Commerce tax revenues flow into the general fund, not an education account.

Also, the Legislative Counsel Bureau has determined repealing the commerce tax, considering that it reduces MBT revenues, would cut revenues by $161 million in the first year and $97 million in the second year. These figures are one-fourth and one-seventh, respectively, of the annual growth in state revenues, which are growing faster than the Nevada economy.

Hence, eliminating the commerce tax would only require that state total spending grow at about the rate of the incomes of Nevada families and businesses. It would not require any cuts at all in current spending for education or otherwise.

The shift in tax burden from consumption to investment and employment and from persons to business diminishes tax neutrality. Neutrality is important because maximizing economic growth and fairness requires that taxes influence as little as possible the spending-versus-savings, investment and employment choices people and firms would make without them.

The choices people would make in markets without taxes would maximize economic growth and also maximize aggregate human wellbeing and fairness, the fundamental public policy goals. Since individuals overwhelmingly use their dollars for consumption versus savings and investment, and businesses spend much of their revenue on goods and services, taxes should fall mainly on consumption of goods and services, and less on savings, investment and employment.​The shift in tax burden from consumption to investment and employment and from persons to business also diminishes transparency. Transparency is fostered by taxing people, not business; as economists note, businesses don’t so much pay taxes in the sense of actually absorbing their economic burden as they collect them for the government from consumers via increased prices and from employees by lower employment and compensation.​With ten taxes accounting for four percent to 23 percent each of general revenues, and considering their incidence mainly on persons and consumption, Nevada’s tax base can be called reasonably well diversified.

This is our third column presenting the findings of the Nevada Controller’s Annual Report (CAR) for fiscal year 2017 (FY17). The first one gave an overview of the whole CAR and the second outlined how the state spent its money. This one details the revenue side: where it got the money.

Folks often assume that government revenues come mainly from taxes. In fact, less than half of Nevada’s revenues now come from state taxes. The majority of revenues are classified as program revenues, which include charges for services and grants and contributions received by the state. General revenues include mainly taxes and also smaller miscellaneous items.

Both program and general revenues are raised in connection with Nevada’s governmental activities and business-type activities (mainly unemployment insurance) and from three state entities that file separate accounting reports in addition to the state accounting reports covering primary government revenues and spending. These three entities are called discretely presented component units, and the Nevada System of Higher Education (NSHE) accounts for nearly their entire total.

Total state spending for FY17 was $13.363 billion, comprised of $7.469 billion (56 percent) in program revenues and $5.895 billion (44 percent) in general revenues.

Revenues from grants and contributions for Nevada governmental activities totaled $5.108 billion, or 39 percent of total state revenues and 68 percent of program revenues. Moreover, they grew much faster than other revenues from FY06 to FY17. This growth raised program revenues from 48 percent of total state revenues to 56 percent. Governmental grants and contributions increased more than $3.2 billion from FY06’s $1.875 billion to FY17’s $5.108 billion, accounting for 58 percent of growth in total state revenues.

Most grants and contributions revenues for governmental activities come from the federal government. Some of these funds are given for capital spending and more for operations. These revenues are mainly comprised of federal government funding for Medicaid, Supplemental Nutritional Assistance (SNAP, or food stamps) and Temporary Assistance for Needy Families (TANF). They are the revenue side of much of the increase in state Health and Social Services (HSS) spending discussed last week.

Most federal grants and contributions carry limitations on the use of the funds; that is, the money is not fungible. Thus, much of the spending of these revenues is driven by federal mandate and also funded by federal government taxpayers, including Nevadans. A notable risk is that federal funding is sometimes reduced, but federal mandates rarely are. Now and in coming years, Nevada faces potentially such a problem with Medicaid revenues and spending.

Charges for services, grants and contracts for higher education comprise nine percent of total state revenues, and they also grew rapidly. Program revenues totaled $1.207 billion for NSHE in FY17, an increase of $298 million, or 33 percent, over the last eleven years. During that time, these charges for services rose from $531 million to $672 million, or by 27 percent. Grants and contributions revenues rose from $378 million to $535 million, or by 42 percent.

These increases offset a decline in payments by the state of Nevada from $706 million to $568 million, or by 20 percent. Total higher education revenues grew from $1.473 billion to $1.923 billion, or by 31 percent. But the changes involved shifting some of the burden from taxpayers to students and their families, who get the direct benefit from higher education.

Other program revenues amount to 8.4 percent of total state revenues.FY17 revenues of $1.108 billion grew only $137 million or 14 percent since FY06, much less than the 34 percent nominal growth in Nevadans’ incomes.In sum, increases in program revenues, driven mainly by HSS and to a lesser extent by higher education receipts grew rapidly while tax revenues grew moderately. In FY06, most state revenues came from taxes. But over the last eleven years, program revenues grew 99 percent, becoming 56 percent of total state revenues. General revenues, consisting mostly of taxes, grew only 44 percent and now account for only 44 percent of state total revenues.​Although past spending growth was supported mainly by increasing grants and contributions, the 2015 tax increases, plus uncertain federal support will place more burden of future spending growth on taxpaying families and businesses.